2017 Wage Negotiations

Feedback received following requests from the five trade unions and the SEFSA-affiliated Associations for time to communicate the proposed deal to their respective constituencies confirms that the overwhelming majority of parties remain firmly on track to close negotiations on the parameters of the proposed deal set out in Issue 11 of this Update.

Regrettably, finalising mandating and constitutional requirements takes time, but we expect that, by the end of this week, we will be in a position to confirm a date for all the Parties to reconvene formally and officially to endorse and sign the Settlement Agreement.

We apologise for the delays, which we know are frustrating to many who have been following the negotiations process with keen interest. However, we cannot rush matters in these crucial closing stages and put at risk all the hard work that has been undertaken to date.

Once all the Parties have officially ratified the Settlement Agreement, the SEIFSA Office will immediately post the Wage Tables on our website (www.seifsa.co.za). A comprehensive Management Circular will follow immediately thereafter.

We will continue to keep you and the SEIFSA Council informed of any developments, should there be any, in the closing stages of this process.

The SEIFSA Council today received a report that the industry is inching closer to approving a Settlement Agreement that is likely to see all the trade unions agreeing to a Settlement Framework that will bring this year’s negotiations to a successful conclusion, avert industrial action and lay the groundwork for industrial peace and stability up to 30 June 2020.
​All the trade unions and the SEIFSA-affiliated Associations have requested time to communicate the proposed deal to their respective constituencies and will revert with their respective positions in the course of this week. The Settlement Framework comprises:​

A three-year Agreement effective from 1 July 2017 to 30 June 2020;

A collective undertaking by all signatories to seek the extension of a Consolidated Main Agreement to all non-party employers and employees;

The retention of Clause 37 and the Full and Final Settlement Clause locking in all terms and conditions of employment contained in the Main Agreement for the duration of this Agreement;

A wage model that introduces wage increases, on actuals, across the board (i.e. from Rate A to H) of 7% in 2017, 6,75% in 2018 and 6,5% in 2019; and

A joint commitment to continue discussions, during the currency of this Agreement, on a range of strategic and vitally important industry issues.

We expect the formalities relating to the ratification of the Settlement Agreement to be concluded in the course of the next week to ten days.
​Once all parties have ratified the Settlement Agreement, the SEIFSA Office will immediately circulate the Wage Tables and post them on our website (www.seifsa.co.za). A comprehensive Management Circular will follow thereafter.\
​We will continue to keep you and the SEIFSA Council informed of any developments, should there be any, in these engagements.

A sub-committee of the Negotiating Team appointed by the SEIFSA Council met with all five trade unions today in an effort to bring this year’s negotiations to a successful conclusion and avert the prospect of industrial action.

Details of the meeting will be shared with the SEIFSA Council at its meeting on Monday, 7 August 2017.

We will continue to keep you and the SEIFSA Council informed of developments in these engagements. No agreement will be concluded with labour in such engagements unless it has the prior approval of the SEIFSA Council.

As you are no doubt aware, the Bargaining Council’s Sub-Committee appointed to resolve the dispute declared by the trade unions on 15 June 2017 concluded its deliberations on 6 July, without reaching an agreement.

In accordance with the mandate from our member Associations, SEIFSA has been engaging directly with labour and other key stakeholders on its own. To date, we have had a series of bilateral engagements with NUMSA and other trade unions, in an effort to avert a strike and to find a solution that is in the best interests of our constituency and the industry.

Representing SEIFSA in such bilateral engagements have been Senior Employer Representatives appointed by the SEIFSA Council, as well as SEIFSA’s Executive Management Team and some SEIFSA Board Members.

To date, no certificate or notice of strike action has been served and we remain confident that for as long as we are engaged in good-faith negotiations to deal with the few remaining issues on the negotiating table, we can avoid a strike and, more importantly, we can find a solution that is in the best interests of our constituency and the industry. Bilateral engagements with all key role players are continuing in earnest and we anticipate another anxious week’s wait before we may be able to present something concrete to the SEIFSA Council for its consideration.

A SEIFSA Council Meeting will take place on Monday, 7 August 2017 and we hope that by then a clearer picture of the situation will have emerged. In the interim, we expect the remainder of this week and next week to be normal, with little or no prospect of industrial action.

We will continue to keep you and the SEIFSA Council informed of any developments, should there be any, in these engagements. Once again, no agreement will be concluded with labour without the prior approval of the SEIFSA Council.

SEIFSA REPRESENTS SMALL AND BIG COMPANIES, AND SEEKS A WIN-WIN DISPENSATION WITH LABOUR

JOHANNESBURG, 12 JULY 2017 – Contrary to propaganda maliciously spread by another employer organisation, the Steel and Engineering Industries Federation of Southern Africa (SEIFSA) represents both small and big companies in its sector and fights hard to represent their interests, SEIFSA CEO Kaizer Nyatsumba said today.

Responding to a statement issued by NEASA today, Mr Nyatsumba said he found it bitterly disappointing that, following the deadlock in the 2017 wage negotiations in the metals and engineering sector, increasingly NEASA CEO Gerhard Papenfus was “viciously lashing out at everybody and everything, with SEIFSA particularly singled out for his worst propaganda campaign”.

Mr Nyatsumba said that Mr Papenfus appeared to be growing increasingly desperate and, in the process, sought to portray SEIFSA as an organisation that represented big employers in the sector and concluded deals only suitable to them.

“Nothing could be further from the truth. We represent both small and big employers. In fact, the overwhelming majority of our member companies employ no more than 50 people. Therefore, in our approach to negotiations with labour, we always strive to reach a deal that is acceptable to all our members, both small and big,” Mr Nyatsumba said.

He also took exception to Mr Papenfus’s attempts to characterize historic wage settlements in the Metals and Engineering Industries Bargaining Council as having been agreements between SEIFSA and one union, NUMSA.

“Nothing could be further from the truth. SEIFSA, which represents 25 independent employer Associations, has always negotiated and concluded agreements with all the trade unions in this sector, including Solidary. Although there are currently five unions within the MEIBC, all six trade unions were signatories to the 2014 settlement agreement,” he said.

Mr Nyatsumba stressed that SEIFSA operated strictly in accordance with a mandate from its member Associations which, in turn, get mandated by their members and keep them informed during the negotiations process. The Federation also regularly writes directly to member companies to keep them apprised of developments.

Mr Nyatsumba said that SEIFSA, whose Economics and Commercial Division closely monitors trends within the sector on an ongoing basis, knows only too well the terrible state in which the sector finds itself and is equally – if not more – concerned about it.

“Unlike NEASA, we do not believe that a solution to the challenges faced by the sector can be imposed on any of our stakeholders, including labour. Instead, we believe in working closely with government and labour, as partners, in search of solutions, instead of standing on rooftops and shouting insults at everybody.

“That is why we engage with labour on an ongoing basis, and not only during wage negotiations, and are involved in ongoing efforts to lobby policy makers in the best interests of the sector. Shouting and pointing fingers is easy, but engaging in a search for win-win solutions is another thing altogether,” Mr Nyatsumba said.

He said that, in keeping with the initial mandate from the SEIFSA Council (an assembly of the Federation’s member Associations), SEIFSA had worked closely with other employer organisations – including NEASA – until last week. It will now engage directly with the unions in an effort to avoid industrial action, “which would have a devastating impact on an already fragile sector”.

“We have absolutely no intention of concluding a deal that would worsen the situation, nor do we have a mandate to do so. Instead, in these bilateral engagements we will seek to conclude a realistic settlement acceptable to our members.

“Clearly, it will not be possible to reach a settlement unless it is fair both to our members and to our labour partners. After all, it is in our mutual interest – and, indeed, South Africa’s – that no further job losses occur and that over time the sector becomes more competitive internationally,” Mr Nyatsumba said.

He said that it was unfortunate that, at a time when employers’ efforts should be on reaching an acceptable deal with labour to avoid industrial action, SEIFSA finds itself having to respond to NEASA’s vitriol and to set the record straight.

“For the record, we at SEIFSA have absolutely nothing against NEASA. We do not consider the organisation to be an enemy and have never singled it out for attacks, which is why we worked with it and other employer parties in a joint employer caucus both during this round of negotiations and in 2014. Unfortunately, our two organisations (SEIFSA and NEASA) no longer agree on the best way forward.

“We find it extremely unfortunate that NEASA has again targeted SEIFSA for these wholly unjustified, vitriolic attacks. We have no intention of responding in kind,” said Mr Nyatsumba.

The Bargaining Council’s Sub-Committee appointed to resolve the dispute declared by the trade unions on 15 June 2017 concluded its deliberations today (6 July) without reaching an agreement.

In the meeting today, the employers tabled a revised position covering the following key areas in an effort to resolve the dispute:

a three-year agreement;

extension of the terms of the agreement to non-parties;

an entry-level wage rate;

an offer to increase wages on actual rates of pay by 5,3% and by 5,5% on the minimum scheduled rates;

a process to expedite the finalisation of the Main Agreement National Exemptions Policy; and

a proposal to strengthen Clause 37 of the Main Agreement (i.e. the clause protecting members from being approached for plant-level bargaining on matters of a substantive nature).

This Revised Employer Offer was supported by all the SEIFSA-affiliated Associations, but NEASA elected not to associate itself with the offer and SAEFA and CEO respectively chose to reserve their rights. The Border Industries Association did not participate directly in the process.

On the whole, all the trade unions have rejected the Revised Employer Offer. However, some of them indicated their in-principle support for certain aspects of the offer and others expressed willingness to continue to engage with employers in an ongoing effort to reach an agreement. On the other hand, NUMSA rejected the offer outright and formally requested the issuing of a certificate confirming that the dispute remains unresolved.

It is important for member companies and Associations to note that no strike (and lock-out action) may be implemented unless:

a certificate is issued by the General Secretary of the Bargaining Council, on instruction from the Management Committee, to any party wishing to proceed with industrial action;

once a certificate is issued, the trade union/s must thereafter issue a clear and unambiguous 48 hours’ notice of an intention to embark on strike action;

the Bargaining Council’s Management Committee is only scheduled to meet on 21 July 2017, which means that any industrial action can only take place 48 hours thereafter; OR

on the expiry of 30 days from the declaration of dispute.

With the trade unions having declared their dispute on 15 June 2017, the 30-day period is due to lapse on Saturday, 15 July 2017. Therefore, strike action can only take place on or after 18 July 2017.

Please note that the issuing of a 48-hour notice of intention to strike does not necessarily mean that strike action will follow immediately. Usually, the notice to embark on industrial action will contain information on the commencement and nature of the intended strike action.

Upon receipt from any union/s of its/their notice to strike, SEIFSA will immediately respond with a 48-hour notice of its own of intended Lock-Out action, on behalf of all its member Associations and their respective member companies. This will have the effect of reserving the rights of individual member companies to implement a lock-out of all striking employees, should they wish to do so.

In accordance with the mandate from our member Associations, SEIFSA has so far worked in a close partnership with fellow employer organisations in the MEIBC. Again consistent with our mandate as revised by the SEIFSA Council on 26 June 2017, the SEIFSA Negotiating Team will now seek to engage directly with labour and other key stakeholders on our own. We hope to begin a series of bilateral engagements with labour as soon as possible, followed by engagements with other parties in an effort to avert an industry strike and to find a solution that is in the best interests of our constituency and the industry.

Representing SEIFSA in such bilateral engagements will be a senior delegation appointed by the SEIFSA Council, which includes SEIFSA’s Executive Management Team, some Board Members and Association Chairpersons of some of our member Associations.

We will continue to keep you and the SEIFSA Council informed of developments in these engagements. No agreement will be concluded with labour in such engagements unless it has the prior approval of the SEIFSA Council.

The Management Committee Meeting of the Council agreed today (21 June 2017) to appoint a sub-committee to meet for the purposes of attempting to resolve the disputes declared by the employers and all the trade unions.

The sub-committee will meet on the following days under the facilitation of the Senior CCMA Commissioner:

Wednesday, 28th June;

Thursday, 29th June;

Wednesday, 5th July; and

Thursday, 6th July

The mandate of the appointed sub-committee is to attempt to resolve the dispute or to recommend to the Management Committee of the Bargaining Council a process by which the disputes can be resolved.

The SEIFSA Council will be meeting on Monday, 26 June to receive a comprehensive report on developments to date and to review and, if necessary, revise the SEIFSA mandate going into the next important phase of the Main Agreement negotiation process.

The Main Agreement Wages and Conditions of Employment Negotiations which continued today (15 June 2017) ended with the trade unions all declaring a dispute against the employers and the employers, in response, declaring a counter-dispute against all the trade unions.

The crux of the dispute declared by the trade unions relates to three views strongly held by labour:

fundamentally, that the trade unions will not accept any changes to terms and conditions of employment that are aimed at diluting or varying downwards the existing terms of employment;

secondly, that any wage offer must be based on actual rates of pay, as opposed to minimums;

and, thirdly, that any eventual settlement must be extended to all non-parties in the industry.

During the session today, the employers made reference to the importance of constructing a new collective agreement that is competitive in nature and caters to the different needs of each employer constituency. Employers again stressed the importance of keeping factors like business sustainability, competitiveness, job retention and job creation in mind during the negotiations.

Employers reaffirmed the offer of a 5,3% wage increase (informed by the current official inflation rate) on the current minimum rates, accompanied by demands for a three-year Agreement, among other things.

In terms of the Bargaining Council’s Constitution, the dispute is now likely to be dealt with at a Management Committee Meeting of the Council on Wednesday, 21 June, where the parties will agree on how best to process it.

The Main Agreement Wages and Conditions of Employment Negotiations held on the 7th and 8th June 2017 ended with the employers presenting a wage model which aims to take into account the difficult economic and business conditions experienced by members.

When the negotiations commenced on 7 June under the facilitation of a Senior CCMA Commissioner, the trade unions provided motivations for their respective demands and requested that the employers respond to their demands and table a wage offer.

In response over the two days, the employers made reference to the importance of constructing a new collective agreement that is competitive in nature and caters to the different needs of each employer constituency. In particular, they highlighted issues related to sustainability, competitiveness, job retention and job creation.

Today (Thursday, 8 June) the employers tabled a 5,3% wage increase (informed by the current official inflation rate) on the current minimum rates, accompanied by demands for a three-year Agreement, among other things. The unions unanimously rejected the employers’ proposals and demanded that they return to their constituencies for revised mandates.

Negotiations are scheduled to continue on Thursday, 15 June 2017. The SEIFSA Council will meet on Monday, 12 June 2017 to receive a report and consider the best way forward.

The structure and format of the 2017 Main Agreement wages and conditions of employment negotiations have finally begun to take shape.

In an unprecedented and strategic move, the four main employer groupings in this year’s negotiations have agreed to appoint an independent person to take on the role of a joint employer caucus facilitator. His primary responsibility will be to get coherency among the four employer groupings and, where possible, to consolidate different employer positions to be presented as common employer views.